In dealing with growing income inequality, economists and social scientists have ignored the interdependencies between economic performance, voter turnout and people's psychological damages and social deprivations. This article emphasises the role of demography for the bargaining power of trade unions and employer associations. It demonstrates the concomitance of full employment and shrinking income inequality and, correspondingly high unemployment and growing income inequality. Due to the decrease in the size of the labour force in Germany since 2005, the gap between higher and lower incomes will soon become smaller, and many economic and social problems can be solved.